FLORIDA STATUTORY EXEMPTIONS
Homestead Exemption - Florida’s homestead exemption is unlimited as long as it is less than ½ acre within a municipality and less than 160 acres outside of any municipality. This exemption extends to the surviving spouse and the heirs of the residence owners. CLICK HERE.
Life Insurance and Annuities-The cash surrender value of life insurance policies and annuities are exempt if created to benefit someone other than the insured. Unless the policy says otherwise, the proceeds of any life insurance policy are exempt so long as the proceeds are not payable to the insured, or the insured’s estate.
IRA- ERISA qualified plans and Roth IRAs under §408A of IRC of 1986 are exempt assets. The statute provides that any money or other assets payable to a participant or beneficiary, and the interest of a participant or beneficiary in, any IRA or other ERISA qualified retirement plan is exempt from all claims of creditors of the participant and the beneficiary.
Disability-Disability income benefits are exempt unless the policy was created for the benefit of the creditor. This includes disability benefits received under any policy or contract of life, health, accident or other insurance.
Wage Accounts. Florida Statute Section 222.11 provides that the wages of a “head of a family” shall not be subject to attachment or garnishment. This means that such wages cannot be reached by a creditor, except for alimony and child support payments. The exemption extends to any bank account maintained by the debtor when the funds in the account can be traced to and identified as wages. To qualify the payments must constitute “wages” owed to the “head of a family”. A person is a “head of a family” if he or she provides more than one-half of the support of another person.
FRAUDULENT CONVEYANCE - HOMESTEAD REAL PROPERTY
Does Florida’s homestead exemption from creditor claims extend to cases where all parties concede that the judgment debtor purchased a home in Florida with the intent to hinder creditors? As explained in this federal court decision, the Florida Supreme Court says YES it does: [T]he Florida Supreme Court has expressly held that “[t]he transfer of nonexempt assets into an exempt homestead with the intent to hinder, delay, or defraud creditors is not one of the three exceptions to the homestead exemption provided for in article X, section 4.” Havoco of Am., Ltd. v. Hill, 790 So.2d 1018, 1028 (Fla.2001). The subsequent ruling affirmed that a judgment debtor’s purchase of home with intent to hinder creditors did not overcome homestead exemption.
Many Sarasota and Manatee County Florida residents have the misconception that in order to engage in asset protection planning they must have significant wealth. Our Sarasota and Manatee Florida clients range from retirees seeking topreserve their assets for their children and grandchildren; entrepreneurs seeking to protect their assets from the risks associated with a business venture or lawsuit; individuals seeking to protect their assets from under water real estate deals, mounting medical bills; and mega-wealthy individuals. In today’s current economic times, Sarasota and Manatee County Florida residents should be concerned about the protection and preservation of their assets and the threat of creditors taking their assets is real and frightening and transcends all levels of personal wealth.
Florida asset protection planning involves taking advance legal measures to delay, deter and sometimes completely avoid the attachment or levy of one's assets by a Judgment Creditor. In other words, making it harder and sometimes ultimately impossible, for your assets to be liened or levied (i.e. taken away) by someone who sues you personally for whatever reason, wins and tries to collect on their judgment (a "Judgment Creditor").
Asset protection laws are different in each state. Florida’s asset protection laws are among the most liberal, debtor-friendly laws in the country. Florida’s asset protection laws apply to permanent residents of Florida and people in other states who own real property in Florida. Florida asset protection is based on the Florida Constitution, state statutes and common law.
A Sarasota and Manatee County Florida resident should consider asset protection planning if they:
(i) anticipate a lawsuit, lien or garnishment of wages;
(ii) are in a profession with a high degree of liability (doctor, lawyer, financial advisor, landlord, real estate developer, real estate investor);
(iii) are a debtor and/or a guarantor;
(iv) have accumulated, or are about to receive, significant wealth (inheritance, investment or business success);
(v) the value of your home has been reduced to less than the amount of your mortgage;
(vi) are having trouble meeting your mortgage or other loan payments; or
(vii) are concerned about the financial viability of your business.
Techniques that are commonly utilized:
(i) Tenants by the Entirety; (ii) Proper Structuring of your Business Ownership; (iii) Family Limited Partnerships; (iv) Life Insurance; (v) Premarital Agreements; (vi) Postnuptial Agreements; (vii) Head of Household status; (viii) Florida Statutory Exemptions (Homestead, Life Insurance, Annuities, Retirement Accounts, etc.); (ix) Limited Liability Company (LLC); (x) Asset Protection Trusts; and (xi) Funding a childs education savings account (pre-paid college or 529).
Feel free to contact me directly to learn more about the options available to you..